The economic impacts:
IT changes relative costs of capital and the costs of information.
Information systems technology is a factor of production.
IT affects the cost and quality of information and changes economics of information.
Information technology helps firms contract in size because it can reduce transaction and agency costs by applying the tancsation-and agency cost theory.
IT flattens organizations because decision making is pushed to lower levels and there is fewer managers needed-IT enabled faster decision making and increase span of control. Another reason why organizations flatten is because in postindustrial societies, authority increasingly rely on knowledge and competence rather than formal positions.
The internet increases the accessibility,storage and distribution of information and knowledge for organizations. It can also lower transaction costs greatly